DES MOINES — Central Iowa is emerging as an economic magnet for high-tech data centers, state and local leaders declared Friday after plans were unveiled for global computer giant Microsoft to phase in a $1.13 billion regional data center over the next four to five years.
Microsoft, a Redmond, Wash.-based corporation that develops, manufactures, licenses and supports a range of services, devices and software products for a wide variety of devices, will receive local and state incentives totaling $87 million to locate its “Project Alluvion” in West Des Moines. Plans call for the company to create up to 84 jobs, many averaging $24.32 per hour, on a 154-acre site at a projected cost of $1.126 billion.
“This is a huge day for all of us,” said West Des Moines Mayor Steve Gaer, who noted the project will generate $8.2 million in yearly property taxes for the city, Polk County and local schools and attract spin-off companies and suppliers that will mean more jobs and tax revenue in the future.
“It really sets up central Iowa as the leading technology center in the United States,” he said.
The data center will house servers and computer equipment to operate large-scale web portal services as part of Microsoft’s online services businesses. The latest project means Microsoft’s investment in Iowa is approaching $2 billion, surpassing Mid-American’s $1.9 billion wind farm investment as the state’s single-largest outlay by one company.
“Records are made to be broken, and Microsoft now has the record, so we’d be pleased to entertain the next investment that would break that record,” Gov. Terry Branstad said at a news conference to announce the Microsoft project.
"Microsoft's decision to again choose Iowa for another significant investment highlights our commitment to the innovation economy," he said. "I think this is just the beginning of what’s going to happen. It will be the catalyst for many more in the years ahead.”
State officials are putting up $20.3 million in investment, research and sales tax credits and refunds for the project. That would accompany local grants, road and infrastructure improvements, along with water, power and sanitary sewer provisions as part of $60.1 million in indirect project contributions that would be offset by property tax and other benefits, according to state Economic Development Authority documents.
Gretchen Tegeler, executive director of the Taxpayers Association of Central Iowa, said the Microsoft development is a win for taxpayers because of its positive net impact on the property tax base. Gaer said he hoped the revenue will bolster public safety and foster relief for other property taxpayers.
“It’s the kind of project that we like to see,” Tegeler said. “Everyone benefits from this.”
Gaer said he thinks the upgrades and improvements made in southeast West Des Moines will result in up to 3,000 acres being developed by related hardware and data providers who already are inquiring because of the Microsoft investment that will be implemented in four phases.
“We really do think that central Iowa will be the leader in global tech companies when it comes to data-center and related businesses,” Gaer said. “We think we have huge momentum. We believe our best days are ahead of us.”